What does Business Income Coverage pay for?

Business Income Coverage is designed to protect an organization's revenue stream when it experiences a temporary interruption due to direct physical loss or damage resulting from a covered peril, such as fire or theft. This type of coverage compensates the business for lost income during the period it is unable to operate normally, allowing it to cover operational costs and maintain financial stability until it can resume business activities.

The focus here is on the relationship between the income loss and the physical damage caused by a peril. This understanding highlights the importance of addressing direct losses tied to tangible assets when evaluating coverage.